KAUR SAIN TRADERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ petition has been preferred with the prayer to quash Order No. VIII (20)7 -Cus/Refund/Misc/2000/ 3571, dated 16.12.2000 (Annexure -6), passed by the Assistant Commissioner of Land Customs Station, Jogbani (Respondent no. 2), and to direct the respondents to refund a sum of Rs.1,70,40,861/ -, levied and collected from the petitioner as Special Additional Duty (hereinafter referred to as SAD) under Section 3A of the Customs Tariff Act, 1975 (hereinafter referred to as the Tariff Act) on polyester/texturised yarn manufactured in Nepal and imported into India by the petitioner during the period 1.3.2000 to 28.9.2000.

(2.) ACCORDING to the writ petition, the petitioner is a partnership firm having its place of business in Ludhiana (Punjab). It had imported polyester/texturised yarn from Nepal in bulk quantity during the period 1.3.2000 to 28.9.2000. After the goods had crossed the Indo -Nepal border, respondent no. 2 levied SAD under Section 3A of the Tariff Act and assessed it at Rs. 1,70,40,861 / -. The petitioner paid the same under protest. Thereafter it raised an issue before respondent no. 2 for refund of the amount, taking the plea that since its imports were exempt from payment of Customs Duty under the provisions of the Customs Act, 1962 (hereinafter referred to as the Act), it was also not required to pay SAD. The contention has been rejected by the impugned order, wherein it is held that it was lawfully realised. Hence this writ petition.

(3.) WHILE assailing the validity of the impugned action, learned counsel for the petitioner submits that since the goods manufactured in Nepal on being imported into this country do not attract basic customs duty under section 12 of the Act in view of the exemption granted under section 25 of the Act, any question of payment of SAD on those imports in terms of section 3A of the Tariff Act also does not arise. The Additional Duties levied under the Tariff Act are duties levied in addition to the basic customs duty under the Act. In other words, the Act and the Tariff Act form one composite legislation complementary to each other and the one cannot be effectuated without having recourse to the other. He relied on the judgment of the Supreme Court reported in 1983(2) S.C.R. page 363 (Ashok Service Centre V/s. State of Orissa). Relying on the judgment of Supreme Court reported in (2001)4 S.C.C. 593 (Associated Cement Companies Ltd. V/s. Commissioner of Customs), he submitted that the principle "Nil duty is also duty" applies to the Central Excises and Salt Act and not in relation to the Act. The goods imported from Nepal are not dutiable goods within the meaning of Section 2(14) of the Act. He also relied on the observations in the judgment reported in (1921)1 KB 64 (Cape Brandy Syndicate V/s. IRC, and quoted with approval by our Supreme Court in its judgment reported in (2004)8 S.C.C. 173 (Commissioner of Central Excise, Pondicherry V/s. Acer India Ltd.).